As much SSB as I can get

With a week to go, I evaluated the situation and decided that my tactic will be to apply for and hope to get as much of the May’19 Singapore Saving Bond (SSB) issue as possible.

The reason is because I think the interest rate has peaked for the time being.

Since I have some cash in my warchest lately due to some aggressive selling of equities, I will try to park them in SSB, the highest return investment product that is risk free in our local market.

I believe interest rate has peaked for the time being because of the following:

(1) Last month, the Fed pulled off a dovish surprise, signaling no interest-rate hikes in 2019. This significant shift in policy will open the door for rate cuts across Asia (and Singapore too) as inflation remains subdued and economic growth slows.

(2) Singapore’s economy is slowing down rapidly.  It expanded only 1.3% in Q1 2019. This is even lower than that of Q4 2018, which is the weakest quarter of growth in the last 3 years. In fact, Q1 2019 performance marked the weakest year-on-year quarterly growth since the second quarter of 2009 – during the global financial crisis.

(3) Sibor rate peaked in March 2019 and has started to decline. POSB published the numbers monthly, you can access the website from here. In March, the 3 months and 12 months Sibor rate was 1.949% and 2.154% respectively. In April, they have dropped to 1.944% and 2.125% respectively. This is significant as Sibor has been climbing since Nov 2018 and this is the first time that the trend has reversed.

(4) The first year interest rate of SSB peaked in Jan 2019 at 2.01% and then started to decline. The first year interest rate of the May issue will be 1.95%. And I think it will decline further in the coming months. The same can be said for the yield for holding the SSB for 10 years.

Part of the reasons for going aggressive for the May’19 SSB was also because the current fixed deposit rate does not beat the SSB. And for those of you who are familiar with SSB, it is a more flexible investment product than fixed deposit. You still get some interest even if you withdraw in between. And best of all, it is government backed and super safe.

The reason of my post is to share my thoughts with you. I don’t think I will create a frenzy for SSB because of this … LOL

Anyway, based on the last few months, the maximum that one can get is only ~ $37,000 or so … even if you throw a million dollar in your application πŸ™‚

Furthermore, the amount that I will be buying in not in that order of magnitude anyway.

Hope you find this useful.

Good luck and have a great remaining days of the week, not forgetting the Good Friday long weekend holiday πŸ™‚



2 thoughts on “As much SSB as I can get

  1. I agree this yr is prob the peak for interest rates not so sure is now. Too bad I did my homework late, so I would still have to aim Jul SSB as jan / jul is really a bad for my cashflow. Gd luck!

    Liked by 1 person

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